Lessons from Michael Seibel on Investing Globally and the Future of Startups in Africa

Lessons from Michael Seibel on Investing Globally and the Future of Startups in Africa
July 5, 2021 Oreoluwa Aremo
Invest In The Future With Michael Seibel Nadayar Enegesi

In the 6th episode of Invest In The Future, Iyin Aboyeji, our Founder and General Partner, spoke to Michael Seibel, Group Partner Y Combinator and Managing Director of YC early stage.

Invest In The Future is our live podcast series. We learn from prolific investors and founders who have invested in and built some of Africa and the world’s most impactful technology companies.

Listen to the entire conversation with Michael below. Subscribe to Invest In the Future wherever you listen to podcasts.

Here’s what we learnt from Michael:

 

Investing in unorthodox ways

1.For someone who has pitched to investors in the past and has received countless nos, Y Combinator’s investment process has always been a breath of fresh air for Michael. 

2.Y Combinator’s investment process enables founders to get money without little or no hassle. ‘’…this is something that more and more investors should do,’’ Michael says. 

3.With this investment process in place, innovators don’t need to have any connections. A simple application is all that’s necessary to get you through that door. 

4.“I love that you don’t need to write a deck. I love that you can be technical, you don’t have to go to business school. I love that you can just be starting or you can be years ahead,’’ Michael adds.

5.There are still mistakes founders make while pitching their solutions to investors. 

6.Michael states that these mistakes are not specific to a single geography and are seen across all boards because people consume the same information. 

7.One of the biggest mistakes is that founders forget software requires technical people to build. 

8.On the other hand, some founders don’t understand the startup framework and are entangled in booming trends only for a season, for example launching a Zoom competitor during a pandemic. 

9.As a founder, you have to be brave. Try not to focus on ideas that people say are good and go beyond your comfort zone. 

10.For someone who also personally invests in companies, Michael says he is not interested in making money but how to help founders raise capital to build what they need to build. 

 

The future of startups in Africa

1.Having the ability to accept money is the foundation of investing in African startups – this is why YC has invested in many fintech startups in Africa like Flutterwave and Paystack. 

2.Locally, accepting money is a problem: this means that local infrastructure for accepting and moving money should be made available. 

3.However, local regulations have clearly hindered startup growth in Africa, and fintech isn’t moving from country to country as fast as it should. 

4.“As Flutterwave, Paystack, and other companies do that hard work, I am excited to see what product and services will stand on your shoulders and be able to spread multi-country, multi-city without needing to deal with local regulations,” Michael shares. 

5.African founders are more ambitious. 

6.Being ambitious is mainly fuelled by the zeal to build a company that will cater to the region and outside the region. 

7.On the other hand, Nigeria is a country filled with intelligent minds who do smart things. 

8.Michael’s visit to Nigeria was an eye-opening experience, and his take back from it was that Nigerian founders would help change Nigeria, the region, the continent and the world. 

9.Pitching ‘’Spotify for Africa’’ or ‘’YouTube for Africa’’ doesn’t make sense because Africans consume global products. 

10.African founders will be able to solve global problems with global products. 

11.In regards to growth, Africa startups shouldn’t be duplicating products that don’t solve problems in people’s lives and their lives. 

As much as Africa has infrastructure gaps, African startups shouldn’t stop building companies that solve problems both locally and globally. “If a government can operate in a software-based country, they will be far more efficient than the American government that still operates in a paper-based country, ‘’ Michael says.  

‘’But I think in the long term if you increase the wealth of the populace, the infrastructure investment will catch up,’’ he adds. 

Listen to the entire conversation with Michael below. Find Invest In the Future wherever you listen to podcasts here.

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